One of the six key principles of an inclusive business relationship is related to New Business Models that promote innovation by multiple actors along the chain in products, services and the underlying processes.
Are innovation processes carried out collaboratively? Who participates and why? If innovation is present, who gains from the results? Are there profit-sharing mechanisms in place? Are small-scale producers encouraged to participate in inclusive innovation?
Rice is a typical crop in Burkina Faso and a prime ingredient in local cuisine. It is consumed as white rice, parboiled rice or rice couscous. The parboiled variety is being increasingly appreciated by the burkinabe for its nutritional qualities. For decades, rice used to be produced by men, sold to the state who took care of applying the parboiling process, and finally resold to the market. But when the liberalisation of rice trade came in, rice farmers suddenly found themselves deprived of their buyers and could not compete with imported rice market prices.
To face the situation head on and help their husbands, some women jointly created the Union Nationale des Etuveuses de Riz du Burkina (UNERIZ), a farmer organisation that purchases rice from farmers, processes it, and then sells it to the market. Today, the organisation counts approximately 3800 members distributed among different departments, each with its own collective parboiling centre.
However, collective parboiling centres do not have sufficient capacity: only a quarter of UNERIZ rice is parboiled in the centres, the rest of the rice is processed at home where often women lack the necessary infrastructure and tools to reach the quality demanded by the market.
To tackle this quality issue, Rikolto and UNERIZ jointly created a franchise model, where the cooperative adopts the role of franchisor rendering services to enterprises of women parboilers. At the same time, the private companies TechnicPropuls and GrainPro joined to supply two technological innovations: solar dryers and a stainless-steel oven kit, which have been designed together with the women of UNERIZ to meet their domestic needs. Concretely, UNERIZ organises training on the use of the parboiling materials and supports women’s entrepreneurial skills. Beside this, in partnership with local banks, UNERIZ provides them with easier access to credit.
The model and technologies have been tested first with a limited number of women parboilers, giving positive outcomes: the stainless-steel oven kit allowed women to steam 100 kg of rice at once instead of 40 kg in the past, an increase of 250% in steaming capacity. At the same time, the former drying procedure required a whole day to obtain a parboiled paddy suitable for husking, whereas today, with the solar dryers, the women reach the same result in 6 to 8 hours, and the parboiled rice is protected from all kinds of contamination.
The quality obtained is so good that their rice can compete with rice imported from abroad and the time needed to complete the parboiling and drying process is reduced. The more the amount of rice that can be parboiled increases, the more the work will be profitable for the women. Nowadays the upscaling phase has started, amplifying the benefits of this initiative to a growing number of women parboilers, 150 in 2020.
This case is a perfect example of win-win relations because everybody benefitted of a slice of the cake: first, individual parboilers now have a better income. Second, UNERIZ is positioning itself on the Burkinabe market with a quality rice. Third, the two companies who had designed the innovative technologies increased their market share and visibility due to the success of the kits and, finally, the end consumer has access to a healthy quality rice produced locally and at a lower cost.
Despite being a staple food for the majority of Indonesians, the market price for rice in Indonesia remains very low, without distinctions between low, medium, and premium quality rice. Farmers that produce premium rice have to depend on the goodwill of buyers to receive an above market-rate income.
To improve the livelihoods of smallholder rice farmers and provide healthy and sustainable rice to consumers, Rikolto has become a member of the Sustainable Rice Platform (SRP), a global multi-stakeholder partnership aiming to promote sustainable rice cultivation. Since 2014, we have been working closely with the Association of Boyolali Organic Farmers (APOB), one of our rice partners in Boyolali regency, Central Java province. We provide them with technical support at the production stage to improve the quality of APOB’s rice, as well as facilitate dialogues and help establish relationships with buyers interested in inclusive business opportunities.
Most farmers’ organisations do not have the necessary equipment and tools to improve their farming and post-harvest processing. In some cases, farmers' organisations would receive some of the essential equipment as part of the government's support. Farmers' organisations also face difficulties in meeting the requirements of financial service providers to get loans. At the same time, buyers are not always on time with their payments. At the buyer level instead, there are financial and payment issues, which can be solved by diversifying the buyers’ portfolio and asking them to pay in advance a percentage of the product.
In an inclusive business model, open discussion between buyers and farmers is fundamental for Inclusive Innovation. The buyer has to visit the fields of the farmer organisation where the rice is produced. The representative from APOB also visits the buyer’s plants to understand their rice quality needs and specification. In addition, before the beginning of the season, the cooperative would need to discuss the business aspect with the buyer (how many times will they buy the rice and how much), so that the APOB farmers can plan the production and schedule the deliveries to meet the demand.
The cooperative buys the rice from the farmers, processes it, and then sells it through different platforms depending on the qualities. The high-quality rice is sold to market distributors through different buyers, while the second quality rice is sold at the local market under APOB’s brand. To have their premium quality rice certified as healthy or organic, the association has an Internal Control System (ICS) in place to guarantee that all rice is produced according to the desired standards.
Rikolto has been facilitating training on ICS to APOB’s boards and organising capacity building activities for its members. Currently, not all farmer groups in APOB are using ICS. To date, APOB has successfully implemented ICS in 11 out of its 26 farmer groups. In 2016, APOB obtained their first domestic organic rice certificate and is now selling organic rice to the buyer Healthy Choice in Jakarta and markets in Solo and Yogyakarta areas.